SPDR® S&P 1500 Momentum Tilt ETF (MMTM)MMTM

ETF SPDR® S&P 1500 Momentum Tilt ETF Overview:

Profile:

The ETF SPDR® S&P 1500 Momentum Tilt ETF (MOM) is a passively managed fund that tracks the S&P 1500 Momentum Tilt Index. The ETF invests primarily in large- and mid-cap U.S. stocks with a focus on those exhibiting strong recent price momentum. Its asset allocation is concentrated in the technology, healthcare, consumer discretionary, and industrials sectors.

Objective:

MOM's primary investment goal is to provide capital appreciation by tracking the performance of the S&P 1500 Momentum Tilt Index, which selects securities based on their 12-month price momentum and volatility-weighted market capitalization.

Issuer:

State Street Global Advisors (SSGA) is the issuer of MOM.

Reputation and Reliability:

• SSGA is a highly regarded asset management company with over $4 trillion in assets under management.
• The firm has a long history of managing passive and actively managed ETFs.
• SSGA has received numerous industry awards and recognitions for its expertise and innovation.

Management:

• The ETF is managed by a team of experienced professionals with deep expertise in quantitative analysis and index tracking.
• The management team has a proven track record of successfully launching and managing ETFs.

Market Share:

MOM's market share in the U.S. large-cap growth ETF category is approximately 2%.

Total Net Assets:

As of November 2023, MOM has total net assets of approximately $2.5 billion.

Moat:

Competitive Advantages:

• Unique Strategy: MOM offers exposure to a momentum-tilted portfolio of large- and mid-cap U.S. stocks, providing potential for enhanced returns compared to traditional market-cap weighted strategies.
• Low Costs: MOM has a relatively low expense ratio compared to other actively managed momentum ETFs.
• Liquidity: The ETF has decent trading volume, ensuring ease of buying and selling shares.

Financial Performance:

Historical Performance:

• Since its inception in 2013, MOM has outperformed the S&P 500 Index on an annualized basis.
• The ETF has experienced periods of strong performance, particularly during market rallies, but has also faced drawdowns during market declines.

Benchmark Comparison:

• MOM has outperformed the S&P 1500 Index in most years since its launch.
• The ETF has also exhibited higher volatility compared to the benchmark, reflecting the inherent risk of a momentum-tilted strategy.

Growth Trajectory:

• The growth of the ETF will likely depend on factors such as:
  • Investor demand for momentum-focused strategies
  • Performance of the underlying index
  • Competitive landscape

Liquidity:

Average Trading Volume:

• MOM's average daily trading volume is approximately 250,000 shares, indicating decent liquidity.

Bid-Ask Spread:

• The bid-ask spread is typically tight, ensuring minimal transaction costs when buying or selling shares.

Market Dynamics:

Factors affecting MOM's market environment:

• Economic growth
• Interest rate changes
• Sector performance
• Market volatility
• Investor sentiment regarding momentum investing

Competitors:

• iShares Edge MSCI USA Momentum Factor ETF (MTUM) - Market Share: 5%
• Invesco S&P 500 Pure Growth ETF (RPG) - Market Share: 4%
• Vanguard Growth ETF (VUG) - Market Share: 35%

Expense Ratio:

MOM's expense ratio is 0.15%.

Investment Approach and Strategy:

Strategy: MOM tracks the S&P 1500 Momentum Tilt Index, which selects stocks based on their 12-month price momentum and volatility-weighted market capitalization.

Composition: The ETF primarily holds large- and mid-cap U.S. stocks across various sectors, with a tilt towards technology, healthcare, consumer discretionary, and industrials.

Key Points:

• Momentum-focused strategy: The ETF seeks to capture potential outperformance by investing in stocks with strong recent price momentum.
• Broad diversification: MOM provides exposure to a diversified portfolio of U.S. equities across different sectors.
• Low costs: The ETF's expense ratio is relatively low compared to other actively managed momentum ETFs.

Risks:

Volatility: The ETF's price can fluctuate significantly due to its focus on momentum stocks, which tend to experience higher volatility than the broader market.

Market Risk: The ETF's performance is tied to the performance of the underlying index and the overall market.